5 Reasons Why You Should Review Your Mortgage Today
For many Australians, one of the biggest investment decision of our lives is often our home. With so many bank and non-bank home loan options available, it’s no wonder it can become a little cloudy when trying to work out the most cost effective way to reduce your mortgage repayments.
In many cases, the loan products that where available all those years ago are simply obsolete and have been replaced by new, often more competitive products – or perhaps you simply had a change in circumstances.
A good mortgage broker can analyze whether your current mortgage plan is as competitive as the current deals available in the market today. This is a vital aspect that you shouldn’t overlook as you may be able to save a hefty chunk on your monthly mortgage with another lender.
Sick of High Interest Rates, or just have too many debts?
Take our 45 second rate quiz to see if you qualify for a better deal on your mortgage!
Whatever the reason, taking some time out each year to chat with your mortgage broker could lead you to some extra savings you didn’t realize you could access.
- Getting a lower interest rate:
It may be possible to reduce your interest rate by reviewing your mortgage regularly and switching to a lower rate, or even just seeing what your current lender can do. Currently mortgage rates are at an all-time low in Australia, so you may be able to take advantage of a much lower rate if you stay informed and look out for opportunities. If you have not signed up for fixed rate mortgage then it may be easier switch between lenders if needed.
- Debt consolidation:
The need to consolidate your debts may arise from time to time. Refinancing provides homeowners a chance to borrow against their home at a considerably lower rate that other short term debts including personal loans, vehicle loans and credit cards. Through accessing equity in your own property you may be able to utilize the lower mortgage rate to help pay off higher interest debts. This of course may increase your mortgage repayment, but can substantially reduce your overall monthly commitments.
- Improvement in your circumstances:
When your circumstances change or your credit rating has improved, so does the lenders who may consider your application. Now that you are in a better financial position you will find more lenders will open their doors. This of course means more choice of products, so there is a good chance you will be able to find something more competitive to what you took out when you’re circumstances where not at their best.
- Unexpected life changes:
If you are experiencing or expect to experience some domestic or professional life changes that may alter your financial situation, then you may want think about reviewing your mortgage well in advance. Perhaps you are thinking of starting a family soon, or you are concerned that your industry of employment might be slowing down or simply want to move away from working away from home in the near future.
These types of changes could certainly affect your financial situation and your ability to meet your obligations or to get a loan approved. The biggest issue here is that once these things occur, it can affect your chances of being able to obtain finance both now and in the future – and to the same extent once these things are confirmed and definitely coming you must notify the bank, which can have a massive impact on their decision to approve your loan.
The solution here is to think a year or two ahead – the possibility of a family in the future is going to have far less impact on your current application than if you are now excepting twins in 6 months. If you have noticed that your co-workers are currently being made redundant, perhaps now is the time to review your financial position and make any adjustments to your loans or consider consolidating now, that way if it does happen, you’ve already sorted out your finances in advance.
- Introductory rates do come to an end!
In many cases when you take out your initial home loan, the most appealing offer at the time could be a 2 or 3 year introductory rate offer. These are great in the early days of your loan as they can often be lower than other offers available at the time, but all good things do have to come to an end. Generally when an introductory rate ends you switch over to a product with a higher rate. Review your mortgage at least a month or two prior to the introductory rate expiring to ensure you don’t switch over to a higher rate!
Sick of High Interest Rates, or just have too many debts?
Take our 45 second rate quiz to see if you qualify for a better deal on your mortgage!
Whatever the reason, it pays to spend 15 minutes once a year to chat to your mortgage broker to see where you may be able to improve your situation. It doesn’t mean you are going to change lenders every 12 months, but at least you can do some forward planning and rest easy knowing that you’re not going to be stuck paying more than you should be.
